I’m not going to take the time right now to present my specific evidence for my fear that most of MMT will most likely end up on the wrong side of democratic accountability (especially if they were to some day be successful).

The more general framework for the claims that I am making about MMT assumes that there is a more pervasive logic of domination the pervades the modern structure of power in the U.S. Nearly all of the commentary on Naked Capitalism assumes (I believe incorrectly) that all conflicts can be defined in economic terms (variations of labor/capital conflict).

But what is consistently missed using this framework is the growing disparity of political power between the average citizen and the professional expert. This disparity of power evolved gradually but seem to have accelerated since WWII.

These experts and their cultural capital (mastery over a particular body of knowledge—with the proper credentials) in the fields of law, economics, finance, medicine, accounting etc.) have helped to create an administrative state that represents to as great an extent as possible their own interests (think as a symbol of this process 2,000 pg bills in Congress on health and financial “reform.”) rather than the interests of the general populace.

From my perspective, MMT, with their claims of superior knowledge, built on the foundation of a naive empiricism covers up their prescriptive lurch for power in this evolving administrative state—the attempt to replace the neo-classical crowd with a new and improved set of scholars–supposedly(as with the neoclassical crowd) simply looking after our interests!

]]>By: A Large Whalehttp://www.nakedcapitalism.com/2012/06/marshall-auerback-germanys-constitutional-conundrum.html#comment-739436
Fri, 15 Jun 2012 04:33:35 +0000http://www.nakedcapitalism.com/?p=30255#comment-739436Sinn’s legal point seems dubious. The Maastricht Treaty does not comprehensively prohibit bailouts (nor does it say that if Greece left the Euro it would lose EU membership and all the other privileges that go with that). Depending on how a package is structured, it shouldn’t present any legal issues, unless the Germans want it to. In short, the legal issues are a fig leaf for the Germans to hide behind, not the real issue.
]]>By: Nathanaelhttp://www.nakedcapitalism.com/2012/06/marshall-auerback-germanys-constitutional-conundrum.html#comment-739341
Thu, 14 Jun 2012 23:49:46 +0000http://www.nakedcapitalism.com/?p=30255#comment-739341Really? I’d like to see your evidence for these claims.

Most MMTers appear to ME — perhaps I’m wrong — to be Greenbackers, who believe that the creation of money should be directly controlled by the elected government. This is exactly the opposite of what you complain about in the current system of government.

The MMTers accurately point out that *government* currently has exactly the powers they describe. They do not usually discuss the political issue: which is that the *elected* government have handed many of these powers over to a bizarre *unelected* portion of the government (The Federal Reserve, Bank of England, ECB, etc.) based on goofy neoclassical economic ideology and rattletrap nonsense about “central bank indepedence”.

I guess I’m saying that the MMTers seem to me to actually be on the side of democratic accountability — and I would expect them to agree with your analysis of the cause of the crisis of democratic legimitacy, caused partly by OTHER economists.

Germany has given money to the *German banks* which hold Greek bonds. It’s not the same thing.

If the German money had gone directly to actual productive activity in Greece, the way the Marshall Plan did, Greece would be booming.

Also, if the Marshall Plan had consisted entirely of recapitalising the banks from Weimar Germany, Germany would still be a smoking ruin.

]]>By: JImhttp://www.nakedcapitalism.com/2012/06/marshall-auerback-germanys-constitutional-conundrum.html#comment-739245
Thu, 14 Jun 2012 19:45:06 +0000http://www.nakedcapitalism.com/?p=30255#comment-739245There are broader political and sociological implications to the MMT analysis of the financial/economic crisis in both Europe and the United States.

The professional academics who have been primarily involved in the creation and expansion of the MMT perspective seem to be attempting to strengthen (under the guise of simply offering a description of how a monetary sovereign actually operates, whether covertly through the ECB for the EU or overtly with the Federal Reserve in the U.S.)a rationale for a system of governance (which has slowly evolved in both Europe and the U.S. over the past 120 years) which shifts authority increasingly away from democratic accountability toward rule (particularly in the area of central banking and fiscal budgets) by expertise in particular schools of economic and legal thought.

In both the U.S. and Europe– these professional experts–(of different political persuasions using different forms of cultural capital) are attempting to create a public and private sphere made in their own image.

This process has helped to ignite a crisis of democratic legitimacy in both continents.

The week after the ruling Germany’s chief justice made it crystal clear in a newspaper interview that permanent transfers of German taxpayer funds cannot be authorised under the existing constitution, even if parliament wishes it so.

His point? To provide for the necessary transfers Germany needs a new constitution. And that requires a referendum. (Federal referendums are not possible, and parliament is the mechanism to amend the German constitution – but this is not about amending, it’s about a new constitution.)

A couple of weeks ago an anonymous German civil servant stated that such a referendum is currently unwinnable. So it’s not even on the horizon.

I feel Germany will wait until the €zone has been pared down to a manageable size.

]]>By: F. Beardhttp://www.nakedcapitalism.com/2012/06/marshall-auerback-germanys-constitutional-conundrum.html#comment-739157
Thu, 14 Jun 2012 17:08:14 +0000http://www.nakedcapitalism.com/?p=30255#comment-739157Money “printing” (for a universal bailout) could be done without debasing the currency IF it was combined with a ban on further credit creation and metered to just replace existing credit as it is paid off.
]]>By: Enragedhttp://www.nakedcapitalism.com/2012/06/marshall-auerback-germanys-constitutional-conundrum.html#comment-739152
Thu, 14 Jun 2012 17:01:54 +0000http://www.nakedcapitalism.com/?p=30255#comment-739152A little too late. Our economy has been parmanently destroyed: the mighty dollar is no longer the world currency and it will be worth nothing in a very short time. We’d be better off with banks and their assets (Ha Ha Ha! Good one! Their “virtual” assets) being seized and all loans written off. That wouldn’t require printing of more money.
]]>By: Hughhttp://www.nakedcapitalism.com/2012/06/marshall-auerback-germanys-constitutional-conundrum.html#comment-739124
Thu, 14 Jun 2012 16:34:05 +0000http://www.nakedcapitalism.com/?p=30255#comment-739124German leaders invoke the law when they don’t want to do something, and don’t when they do. Sounds like a pretty typical response for a kleptocracy.
]]>By: LeonovaBalletRussehttp://www.nakedcapitalism.com/2012/06/marshall-auerback-germanys-constitutional-conundrum.html#comment-739119
Thu, 14 Jun 2012 16:17:51 +0000http://www.nakedcapitalism.com/?p=30255#comment-739119No, because the U.S. acted “in time.” This Germany failed to do, hence the “unintended consequences” of FAILURE (Aaargh!) to bite the bullet in time (when it was but one bullet).

Besides, do we not behold in the “German” populace today the DNA of “Hitler’s Willing Executioners” even as the EuroPrincely .01% (“Nobility”) today expresses the DNA of the “Rentier class” bailed out in the Versailles Treaty at the expense of the working stiffs, as Veblen understood so keenly?